The abandoned 105-year-old former courthouse at the corner of E. 161 St. and Third Ave in Melrose has seen better days, but a local nonprofit hopes federal tax credits may help the landmark building known as the “Gray Lady” come back to life after decades of neglect.

The owners of the majestic 82,000-square-foot building, developer Henry Weinstein and Liberty Square Partners, hope investors will be attracted by the tax credits they would be eligible for under a 25-year-old federal program, and that big commercial firms will want to rent the space they have renovated.

The landlords have enlisted SoBro, the Mott Haven-based community development organization to help them SoBRO find investors who could be interested in the project.

The Tax Reform Act of 1986 allows investors to get a 20% tax break for certain rehabilitation projects, such as the courthouse, which the owners are hoping will raise the iconic lady’s status among suitors once again.

Circumstances were not always so dire for the courthouse. Although it now sits idle and graffiti-covered betweenthe newly-built Boricua College, a sprawling swath of new Melrose housing developments, and a row of dingy shops, the Beaux Arts beauty served as the Bronx Supreme Court from the time it was built in 1906 until the 1930s.

The city designated the building a landmark in 1986, then closed it down seven years later after years of disuse and deterioration.

“Eliminating the blighting influence that this majestic, yet severely distressed property places on the community is just as vital to preservation as granite walls, mansard roofs or marble floors,” said Rebekah MacFarlane of SoBRO.

“Reviving the original grandeur of the courthouse through adaptive re-use will honor the past, yet promote 21st century practices in energy conservation,” MacFarlane said, adding that rehabilitating older buildings like the courthouse saves money and preserves energy and resources that would otherwise be required to construct entirely new structures.

Nos Quedamos once hoped to make the courthouse the town hall of Melrose, but City Hall blocked its efforts. Mayor Rudolph Giuliani put a thumb in the eye of his rival Bronx Borough President Fernando Ferrer, turning down Nos Quedamos bid to buy the building from the city for a dollar and renovate it with privately-raised funds. Instead, the city auctioned it.

The current owners bought it in 1998 for $300,000. Over the years they have announced several turning points for the structure, only to have potential occupants bow out because of the cost of renovating the space to make it useable again.

SoBRO’s President and CEO, Phillip Morrow, hopes the tax credit program will “enhance the value of the refurbished property,” and “improve the value of the surrounding housing stock, attract consumer traffic, and revitalize local businesses.”